Refer to the following figure:
The figure above shows cost curves for a perfectly competitive firm.
-Suppose that market price is $2.60. A firm producing 800 units of output
A) is earning the maximum amount of profit, $880.
B) is earning the maximum amount of profit, $2,080.
C) should produce 500 units of output instead, to earn profits of $500.
D) should produce 1100 units of output instead, to earn profits of $1,100.
E) should shut down
Correct Answer:
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